China Life Buys into COFCO Futures
Jan 31, 2013 (Menafn - SinoCast Daily Business Beat via COMTEX) --China Life Insurance Co., Ltd. (sehk:2628 and SHSE), the biggest life insurer in the Chinese mainland, has bought into COFCO Futures Brokerage Co., Ltd.
According to a statement by the futures firm, the life insurer took a 35 percent stake in it for CNY 296.2 million recently, becoming its second-biggest shareholder after COFCO Corp. It was the first time for an insurer to buy into a futures firm in the market and in line with industry observers, this should be a strategic move the life insurer took to participate in T-bond futures and stock index futures trading in the near future. Futures firms in the market have seen their business scopes continue expanding since last year and driven by this, their positions in the domestic financial market continued rising. Stock index futures, asset management business and to-be-launched T-bond futures of them are proved to play a more important role in the market, thus their license resources draw rising interest of other financial institutions including securities brokers and insurers.
Actually, it has not been news for a non-futures financial institution to buy into a futures firm in the market since the second half of last year. On January 4 this year, Southwest Securities Co., Ltd. (shse:600369) said that it had won a nod from the board to acquire a futures firm for not more than CNY 120 million and its major target was Southwest Futures Brokerage Co., Ltd. Last October, Shanxi Securities Co., Ltd. (szse:002500) said that it planned to put Green Futures Brokerage Co., Ltd. into pocket for about CNY 1.14 billion and the target had been qualified to be engaged in commodity futures brokerage, financial futures brokerage and futures investment consulting.
The China Securities Regulatory Commission (CSRC), the top Chinese securities regulator, made a survey on futures firms in the market in July 2012 and according to the results, the domestic futures market is mainly consisted of three types of futures firms, namely spot-goods ones, securities broker-backed ones, and traditional ones. The pattern maintains, but the comprehensive strength of spot-goods ones drops sharply while that of securities broker-backed ones rises largely. And among the top 20, 10 are securities broker-backed ones and eight are traditional ones.
There are over 160 futures firms in the market currently, but the comprehensive strength of them is quite different. In order to encourage industrial mergers and acquisitions (M&As), the watchdog failed to agree new futures firms to be established in a large scale last year.
(USD 1 = CNY 6.22)
Source: www.yicai.com (January 31, 2013)
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